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Queensland Resources Council acting chief executive Greg Lane said the industry could not understand why the legislation was being introduced. “The whole thing just doesn’t add up. I don’t understand what policy problem has been solved here," he said.

“If the companies are acting lawfully and legally, it’s a bit of a rough end of the pineapple to say your tenure is over and you can’t explore."

But Mr Hinchliffe said the government needed to act given community concerns about increased coal and gas exploration near urban centres.

In 2005, only 2.2 per cent of the state was covered by exploration permits. Now it’s heading towards one-quarter of the state.

“That’s a good thing in one respect, because it’s reflective of the health of the mining sector in the state," he said.

“But it’s also a side-effect of more areas of the state being exposed to exploration than has been before. Obviously that’s happened as the same time as ongoing urban expansion."

The proposed laws, which will be introduced later this year but back-dated to mid-August, ban mining exploration within 2 kilometres of towns of 1000 people. But Mr Hinchliffe said the town limit could be increased to include larger population centres.

“The reality is we’re asking people for their views. It could be less, it could be more, it could be a different measure of the issue of concern," he said.

“It’s more about population density than sheer numbers, but the sheer numbers is generally a good indicator of the density."

Mr Hinchliffe admitted the selection of the town size limit was always going to make some people unhappy.

Under the proposed laws, local governments may also opt in or out of the restricted area depending on what they consider to be in the best interests of their community.

The Toowoomba Coalmine Action Group, which had been lobbying against mining exploration at Gowrie Junction and Kingthorpe, is now safe under the new legislation.

But group president Jim Wiltshire – who grew up in Wandoan, where Xstrata’s coalmine is being challenged in the courts today – said the new laws were a start but did not go far enough.

“My heart goes out to those people: why do they deserve less protection because they live in a smaller community? It’s still an urban centre," he said.

“Those smaller towns have no security and probably more uncertainty now. At what point do you say the health of the people [in centres] under 1000 people is not as important as those over 1000 people?"

Mr Wiltshire said the 2km buffer between exploration and urban areas should be increased to 5km.

But the Bligh government said smaller communities would still be covered by existing protections, including the strategic cropping legislation which protects prime agri­cultural land.